On October 26, Fitch Ratings upgraded over $1B in Airports Division bonds to ‘A’ from ‘A-‘. At the time, Kurt Yamasaki, Fiscal Management Officer of HDOT Airports Division, explained, “The upgraded rating will translate into millions of dollars in savings through lower interest rates for future bond issuances.”

The upgrades included “$167 million of outstanding series 2013 lease revenue certificates of participation ….” According to Investopedia: “A certificate of participation (COP) is a type of financing where an investor purchases a share of the lease revenues of a program….”

This is where it gets interesting.

With repossessors seizing its airplanes, Island Air filed for bankruptcy protection October 16, 2017. Ten days later, Fitch’s upgrade stated, “The Airports Division expects near-term traffic results will be better than projected due to Island Air expanding interisland traffic, more than doubling capacity over last year….” Island Air cancelled all flights and shut down operations on November 10, 2017.

Perhaps Fitch’s research was conducted before Island Air’s crisis was known?